Report: Microsoft planning to cut costs, avoid layoffs

We knew the 15,000 layoffs number was an unlikely one, and a new report seems …

Earlier this year we reported on mass layoffs that Microsoft was planning, according to various sources. The date in question was January 15, 2009, one week before Microsoft's Q2 earnings, and the number was ridiculously high: 15,000 employees, or about 17 percent of the software giant's workforce.

Obviously we thought such a high number was very unlikely, and a recent report by CNBC seems to back up that uneasiness. The report also quotes "sources," and notes that the cost-cutting is due to a global slowdown in sales. Here's the crux of the report:

However, sources tell me the cuts will largely be handled through attrition and the non-renewal of contract employees, rather than through a rumored, sweeping layoff. A Microsoft source tells me that the speculation is "grossly exaggerated," but added that "any company not paying careful attention to headcount in a climate like this is nuts."

While this route sounds a lot more likely than axing almost a fifth of a company's workforce, the software giant probably did consider layoffs at one point or another due to the US economy, or these rumors would never have appeared. Layoffs are still a possibility, but it looks like Microsoft will use them as a last resort, first cutting costs in other ways.